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Strategies & Market Trends : NetCurrents NTCS
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To: Digger Sacket who wrote (91)10/1/2000 9:05:12 PM
From: Teresa Lo  Read Replies (1) of 8925
 
"Do you know if it is possible to manipulate the market by running the stops? Does this apply to only the open outcry system, or the electronic Globex as well? Anyone know?"

All I know is that the spikes are indeed created by the execution of stop orders. These tend to be clustered around yesterday's high and low, the first hour's high and low and other important swing high and low "pivot points". I think the locals on the floor can easily see where they are, and when the market gets close to it, there is a tendency for price to gravitate towards it and "run them". It's very simple to figure out where they all are, since most traders love to buy breakouts and sell new lows.

It happens in futures trading with both open outcry and Globex, and certainly in stocks. This is why we never enter stops at these points - ever.

Teresa
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